Posted: November 28th, 2015

Cost analysis Business and Management

Q2

Competition of industrial products in the market is a major challenge to every company. Careful decisions are necessary to maintain continuous flow of income. Brown-Forman Corporation requires professional business analysis to compete with other companies. It should continue supplying Canadian Mist Distillery with the barrels. Such strategy creates a forum for competition with other similar industries (Brown-Forman Cooperage 2014). The company should not consider withdrawing from the supply.

In addition, involvement in supply competition improves quality of products that the Corporation produces. Canadian Mist Distillery seems to have a reason of neglecting supplies from Brown-Forman Corporation. The barrels may be of low quality in comparison to other external suppliers. Involvement in the competition may help the company realize its mistakes and respond appropriately. Furthermore, competition does not allow rival companies to flourish.

The decision to continue supplying Canadian Mist Distillery with barrels also increases level of productivity of the supplier. Brown-Forman Cooperage will have to increase the number of barrels it produces (Brown-Forman Cooperage 2014). As such, the industry develops rapidly. Although the Distillery’s demand for oak barrels reduces, the corporation should look for more consumers to fill the gap. Generally, Brown-Forman Corporation should consider the Distillery as one of the consumers while they search for more market.

B)

The alternative of supplying Canadian Mist Distillery with barrels from Brown-Forman’s branch is a perfect idea. It involves assigning one branch the task of supplying the whole distillery company with products. The corporation will have to fund its branch adequately to meet demands of Canadian Mist Distillery (Brown-Forman Cooperage 2014). The consumer may resort to the Corporation’s barrels again.

Developing a constituent of an industry has a positive impact on the whole company. The management of Brown-Forman in Louisville can equally sign an agreement with the Distillery Company. Such an agreement reinforces terms of business transactions. Similarly, business understanding prevents abrupt withdrawals from trade activities in future.

Additionally, the decision to expand the company’s segment can develop the branch significantly. It may progress to become a big company with its own management. The extension also allows the company to supply barrels in large-scale. Consequently, the general public also benefits from the company’s progress due to availability of employment. It is necessary to expand Brown-Forman in Louisville to meet high demands of the Canadian Mist Distillery (Brown-Forman Cooperage 2014).

1. C)

Relocating Brown-Forman Cooperage to a new place has advantages and disadvantages. Analysis of the pros and cons can help in decision-making. The relocation may take a lot of time and resources. Furthermore, searching for new consumers may prove a difficult task. It is also expensive to transport raw materials and consumable products over long distances (Brown-Forman Cooperage 2014).

Serving internal customers only during relocation may be achievable. The task becomes difficult when the company intends to include external consumers in the business (Brown-Forman Cooperage 2014). Ensuring growth of the industry requires additional capital. Input of capital may outweigh the output hence the company may incur losses. It is explicit that moving Brown-Forman to a new location may do more harm than good.

Q5

The concept of “cradle to grave” is more applicable in industrial setting. It means that a producer is accountable for the environmental effects of any product that they manufacture until its extinction (Brown-Forman Cooperage 2014). Nonfunctional barrels have various uses especially at household level. They can serve as furniture, house for pets or flower gardens. Such household uses help in preventing environmental pollution.